GranBio Planing Second Brazil Site for Cellulosic Ethanol

Source: By Vanessa Dezem and Gerson Freitas Jr, Bloomberg • Posted: Thursday, October 16, 2014

GranBio Investimentos SA, the Brazilian biotechnology company that opened the southern hemisphere’s first cellulosic ethanol plant last month, is close to announcing a partner for its second facility.

The new plant will be comparable in size to the $190 million-Bioflex 1 plant, Bernardo Gradin, GranBio’s chief executive officer, said in an interview yesterday in Bloomberg’s offices in Sao Paulo. He’s also planning a second biochemical plant.

Bioflex 1 uses sugarcane waste to produce 82 million liters (22 million gallons) of second-generation ethanol a year. Gradin expects to invest 4 billion reais ($1.7 billion) through 2020 to open at least 10 additional biofuel and biochemical facilities. Gradin didn’t provide additional details about the new projects.

“With our investments, we will make second-generation ethanol in Brazil more competitive than it is in the U.S.,” he said. Standard ethanol is made from sugar cane juice, while the second-generation version is made from stalks and other waste parts of the plant.

About 88 percent of the cars in Brazil can run on either gasoline or ethanol. Car sales in the country increased 25 percent in the last five years and gasoline won’t meet the nation’s need for transport fuel, Gradin said.

That’s going to increase demand for ethanol at a time when production is sliding. The industry produced 24 billion liters of standard cane ethanol in the 2014-2015 season, down from 27.5 billion liters in the prior season, according to the industry group Unica.

Cellulosic Fuel

The result will be more demand for cellulosic fuel.

Gradin’s goal is to produce the fuel for about 20 percent less than the cost of standard cane ethanol. “We need to make it faster and cheaper,” he said.

GranBio was formed in 2011 and has received 700 million reais in investments. About 60 percent of that was borrowed from the state development bank BNDES, Brazil’s research-financing agency Finep and Banco do Nordeste do Brasil SA.

Gradin’s family owns 85 percent of the company and BNDES, Banco Nacional de Desenvolvimento Economico & Social, has 15 percent.